The environmental spillovers of buyers' digital transformation: Evidence from China

Abstract

With respect to the carbon reduction effects of digital transformation (DT), the literature focuses mainly on individual firms' performance, ignoring the environmental spillovers arising from supplier-buyer interactions from a supply chain perspective. By examining the positive impact of buyers' DT on suppliers' carbon emission reduction (CER), we validate the existence of buyers' DT environmental spillovers. This study collects and analyzes supply chain data of Chinese A-share listed firms during 2008–2021. We construct an ordinary least squares (OLS) model and perform a cluster-robust estimation with supplier-buyer pairs as clusters. Mechanism analysis identifies two environmental spillover mechanisms—the pushback and technology spillover effects. Moreover, we find a spatial decay pattern in the buyers' DT environmental spillovers. Heterogeneity analysis indicates that such spillovers are more pronounced when suppliers are identified as polluters or when the digitization gap is narrower. This study complements the green supply chain management (GSCM) literature and provides relevant suggestions for governments and manufacturing firms in emerging economies.